Stop Guessing: How to Uncover Your True Mortgage Credit Score
Let's talk about something crucial when it comes to getting a mortgage: your true mortgage credit score. Knowing this bad boy is absolutely essential if you want to secure that dream home. But here's the deal: many folks out there are just guessing their score or relying on sources like Credit Karma, Wallet Hub, or the score showing on their credit card website to be their true score, but it is not. In this post, we will talk about why it is so important to know your true mortgage credit score, where to find it, and what score is needed to be approved. I bet you are wondering how I know these things. Well, I have been in the mortgage industry for over ten years. I am currently an FHA, VA, and Conventional Loan Underwriter for one of the leading mortgage companies. I know what is needed, and I know where you, yourself, can find the information. Let’s get into it!
Importance of Knowing Your True Mortgage Credit Score
Your mortgage credit score plays a critical role in determining your loan eligibility and interest rates. Lenders rely on this score to assess your creditworthiness and make informed decisions about lending you money. By knowing your true mortgage credit score, you gain a clear understanding of where you stand in the eyes of lenders. This knowledge empowers you to take proactive steps to improve your score or make strategic choices based on your current standing. Knowing your score upfront allows you to avoid the impact of a hard inquiry since checking your own credit won't affect your score. That way, if you don’t have the score to qualify, it won’t negatively impact you, and you can continue to build your score up.
Common Misconceptions with Credit Scores
One of the biggest misconceptions is assuming that your general credit score is the same as your mortgage credit score. In reality, mortgage credit scores utilize specific models tailored for mortgage lending, which may differ from other credit scoring models. Relying on a general credit score or guesswork can lead to unrealistic expectations and disappointments during the home-buying or refinancing process. Mortgage lenders use a mortgage FICO score, Mortgage FICO Scores 5, 4, and 2. This is different from the scores you see on Credit Karma, WalletHub, and scores you see on your bank or credit card statement. Your score may be 650 on Credit Karma, but your actual Mortgage FICO score could really be 590.
Where Can I Find My True Mortgage Credit Score?
The place I discovered where you could find your true mortgage credit score is MyFICO.com. When I went through the home-buying process, the score I pulled on MyFICO.com was the EXACT score my lender used. Whenever I refer someone for a mortgage, this is the first place I have them check, so they know upfront if they will qualify credit-wise or not. This website provides many different FICO options and allows you to be more prepared when shopping for a home, car, personal loan, or credit card. If you are looking to buy a home or refinance your home, I highly recommend checking here first.
What Score is Needed to Qualify for a Mortgage?
A FICO Mortgage credit score of 620 is the ideal place to be. This score can get you qualified for both FHA & Conventional Loans. FHA, however, does allow approvals with scores as low as 580. However, the qualification criteria is a little more in-depth in regards to required documentation and the look of your file in general. When attempting to qualify you for a mortgage, lenders look at all three bureaus (Transunion, Equifax, and Experian). The middle score of all three bureaus is what is used. For example, if your Experian score is 720, your Transunion score is 680, and your Equifax score is 590. Your score used to qualify would be the Transunion score of 680 because it is the middle highest score of all 3.
Let’s Wrap It Up!
Knowing your true mortgage credit score is a game-changer when it comes to securing your dream home. Many people rely on guesswork or inaccurate sources, like Credit Karma or their credit card websites, assuming those scores are the same as their mortgage credit scores. However, this can lead to unrealistic expectations and disappointment during the home-buying or refinancing process. The key is to find your true mortgage credit score, and I've discovered that MyFICO.com is the go-to platform for this. By checking your score on MyFICO.com, you can get the exact score used by lenders and be more prepared when applying for a mortgage. Remember, lenders primarily consider the middle score from all three credit bureaus, so make sure you know your credit standing across the board. Aim for a FICO Mortgage credit score of 620 or higher to increase your chances of qualifying for both FHA and Conventional Loans. By knowing your true mortgage credit score and understanding the qualification requirements, you'll be well-equipped to confidently navigate the mortgage process and increase your chances of homeownership.